Virgin Galactic and Social Capital Hedosophia announce merger
(9 July 2019 - Virgin Galactic) Virgin Galactic (VG) and Social Capital Hedosophia (SCH), a public investment vehicle sponsored by Social Capital and Hedosophia, announced that the boards of directors of each company have approved a definitive agreement under which VG and SCH will merge, with the current shareholders of SCH expected to own up to approximately 49% of the combined company.
Upon closing of the transaction, which is expected in the second half of 2019, VG will be introduced as the first and only publicly traded commercial human spaceflight company.
(courtesy: Virgin Galactic)
VG is a vertically integrated aerospace company specializing in commercial human spaceflight. Using proven and reusable technology, it intends to offer its customers a unique, multi-day experience culminating in a personal spaceflight that includes out-of-seat zero gravity and views of Planet Earth from space.
VG believes it has now reached an inflection point in its development as it progresses towards launching commercial operations. In particular, by demonstrating the repeatability of the full flight profile through the completion of two crewed spaceflights, VG believes it has overcome a substantial number of the technical hurdles required to make the company a viable and profitable commercial service.
VSS Unity, VG’s spaceship, was the first and remains the only vehicle built for regular commercial service to have put humans into space. VG’s inaugural spaceflight in December 2018 was also the first and only human space launch from U.S. soil since 2011. During its second spaceflight in February 2019, VSS Unity became the first vehicle built for commercial service to carry pilots as well as crew.
Having reached these milestones, the Board of VG believes that the additional capital provided by the merger with SCH will provide the company with the support needed to reach commercialization.
In addition to the more than $1 billion that has been invested in VG since its inception in 2004, VG believes its position within the emerging commercial human spaceflight market is reinforced by other significant barriers to entry for potential competitors. These include the vertically integrated technical and operational expertise built over 15 years, an established and highly experienced workforce and the strength of the Virgin Group’s brand recognition. VG has built a unique, pre-commercial service order book of more than 600 space tourism customers backed by over $80 million in deposits. In a transforming world of experiences and social media, VG believes that the market for exclusive, experiential products will continue to expand quickly and represents a significant opportunity for future growth.
As part of its commercial operations, VG has exclusive access to the principal assets at Spaceport America, New Mexico. Spaceport America is the world’s first, purpose built commercial spaceport. As announced on May 10, 2019, VG is moving more than 100 spaceline staff and its space vehicles to Spaceport America, which will become the new location of its operational headquarters. Spaceport America will be the site of VG’s initial commercial spaceflights and where the company will deliver a high-end, exclusive customer experience over the multi-day pre-flight period.
As part of this transaction, the existing management team of VG will remain in place following the close of the transaction with George T. Whitesides remaining as CEO, while a new Board, comprised of seven directors, will be augmented by the addition of Chamath Palihapitiya, as Chairman, and Adam Bain, both of whom are committed to the success of VG.
Sir Richard Branson, Founder of VG, said: “Great progress in our test flight program means that we are on track for our beautiful spaceship to begin commercial service. By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts. We are at the dawn of a new space age, with huge potential to improve and sustain life on Earth. I am delighted that SCH has decided to become such an important part of our amazing journey. They share our dreams and together we will make them reality.”
George Whitesides, CEO of VG, said: “This transaction represents the next step of our exciting journey. We believe it will offer us the financial flexibility to build a thriving commercial service and invest appropriately for the future.”
Chamath Palihapitiya, Founder and CEO of Social Capital Hedosophia, said: “It is a privilege to partner with Sir Richard Branson, a once-in-a-generation visionary, to bring the reality of commercial spaceflight to the world. We are confident that VG is light years ahead of the competition. It is backed by an exciting business model and an uncompromising commitment to safety and customer satisfaction. I cannot wait to take my first trip to space and become an astronaut.”
About Social Capital Hedosophia
Social Capital Hedosophia Holdings is a partnership between the investment firms of Social Capital and Hedosophia. Social Capital Hedosophia Holdings unites technologists, entrepreneurs and technology-oriented investors around a shared vision of identifying and investing in innovative and agile technology companies.
About Virgin Galactic
Virgin Galactic is the world’s first commercial spaceline. Founded by Sir Richard Branson and owned by the Virgin Group and Mubadala Investment Group, Virgin Galactic will transform access to space for the benefit of life on Earth. To date, over 600 men and women from 60 countries—greater than the total number of humans who have ever been to space—have reserved places to fly on Virgin Galactic’s reusable space launch system, consisting of carrier aircraft WhiteKnightTwo and spacecraft SpaceShipTwo. SpaceShipTwo and WhiteKnightTwo are manufactured and tested in Mojave, California by its manufacturing partner, The Spaceship Company (TSC). Spaceflight operations will be based at Spaceport America in New Mexico, the world’s first purpose-built commercial spaceport.
About The Spaceship Company
The Spaceship Company (TSC) is Virgin Galactic’s space-system manufacturing organization. Headquartered at Mojave Air and Space Port in Mojave, California, it is building and testing a fleet of WhiteKnightTwo carrier aircraft and SpaceShipTwo reusable spaceships that, together, form Virgin Galactic’s human spaceflight system. Its team of talented and dedicated engineers, technicians and professionals are drawn together by a willingness to disrupt and challenge the status quo and deliver innovative aerospace solutions to our customers’ needs. TSC’s extensive capabilities encompass preliminary vehicle design and analysis, manufacturing, ground testing, flight testing and post-delivery support.